The high prevalence of mental disorders such as depression and dementia in institutionalized elderly patients warrants screening for psychiatric diagnosis in patients newly admitted to long-term care facilities. The diagnostic accuracy of the Mini-Mental State Examination (MMSE) and the Geriatric Depression Scale (GDS) was evaluated against a standardized psychiatric interview. The MMSE was found to be 81% sensitive and 83% specific in screening for dementia using a previously established cutpoint of less than 24/30 points. Adjusting MMSE scores for physical disabilities precluding completion of specific tasks on the MMSE did not significantly change the diagnostic accuracy of the test. The GDS was 47% sensitive and 75% specific in screening for depression using the suggested cutpoint of greater than 13/30 points. The MMSE was significantly correlated with functional status (r = 0.48, P = .0001), but not with the scores on the GDS or the clinical diagnosis of depression. The GDS did not correlate with functional status. In summary, the MMSE is a good screening test for dementia in institutionalized elderly, but the GDS is not sensitive for depression in this population.